Transaction planners usually view the DOJ or FTC scuttling their deal as the “worst case scenario” for the outcome of an antitrust merger investigation. But as bad as that downside is, this Crowell & Moring memo is a reminder that it can get much worse – parties could find themselves facing civil or even criminal antitrust charges. This excerpt addresses a recent example:
In recent years, for example, the U.S. Department of Justice’s Antitrust Division has brought several civil and criminal prosecutions for anticompetitive conduct uncovered during a merger investigation. The most recent example of such follow-on prosecutions surfaced over the last several weeks when the DOJ announced that it had reached settlements with a number of the nation’s largest broadcast television station groups in a civil information sharing investigation.
In these cases, the DOJ charged the seven defendants with participating in an unlawful information sharing scheme where they exchanged – either directly or through advertising sales firms – non-public, competitively sensitive information in order to prevent local and national advertisers from negotiating better terms, including lower prices.
Since filing these enforcement actions and the accompanying settlements, the DOJ has publicly confirmed that it uncovered this information sharing scheme during its investigation into a proposed merger involving two of the defendants – a merger that was eventually abandoned after the DOJ and Federal Communications Commission (FCC) raised concerns about the deal’s likely competitive effects. The DOJ has also indicated that it is actively investigating other companies and that this ongoing investigation will likely result in additional charges in the coming months.
The memo provides an overview of this DOJ investigation and outlines key steps that companies can take to mitigate the risk of civil or criminal antitrust charges arising out of a merger investigation.
– John Jenkins